AOL to Cut One-Third of Work Force

AOL will shed approximately a third of its work force in the coming weeks and months, as it seeks to shave $300 million in operating costs and restore the company to financial health.

In a securities filing today, the company said it will incur restructuring charges up to $200 million, nearly all of which will occur when it spins off from Time Warner on Dec. 9. AOL will initially ask employees to volunteer for severance under a program that runs from Dec. 4 until Dec. 11. If the company doesn’t reach its target savings during that time frame, involuntary layoffs will also take place.

Additionally, CEO Tim Armstrong will forgo his bonus this year. In an e-mail to staff, he noted, “As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forego my 2009 bonus. That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees.”

AOL will reduce its headcount by up to 2,500, placing it among the largest staff cuts in recent Internet history. In the past year, Yahoo undertook layoffs of about 1,400, Microsoft and Google made smaller cuts, and AOL — under CEO Randy Falco — undertook rolling layoffs of approximately 700 staff.

They also said gossip site TMZ would stay with Time Warner as part of its Time Inc. unit.

This story has been updated with details about the voluntary layoff program and Armstrong’s bonus.